Jordan BTI 2022 Country Report - BTI Transformation Index
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BTI 2022 Country Report Jordan
This report is part of the Bertelsmann Stiftung’s Transformation Index (BTI) 2022. It covers the period from February 1, 2019 to January 31, 2021. The BTI assesses the transformation toward democracy and a market economy as well as the quality of governance in 137 countries. More on the BTI at https://www.bti-project.org. Please cite as follows: Bertelsmann Stiftung, BTI 2022 Country Report — Jordan. Gütersloh: Bertelsmann Stiftung, 2022. This work is licensed under a Creative Commons Attribution 4.0 International License. Contact Bertelsmann Stiftung Carl-Bertelsmann-Strasse 256 33111 Gütersloh Germany Sabine Donner Phone +49 5241 81 81501 sabine.donner@bertelsmann-stiftung.de Hauke Hartmann Phone +49 5241 81 81389 hauke.hartmann@bertelsmann-stiftung.de Claudia Härterich Phone +49 5241 81 81263 claudia.haerterich@bertelsmann-stiftung.de Sabine Steinkamp Phone +49 5241 81 81507 sabine.steinkamp@bertelsmann-stiftung.de
BTI 2022 | Jordan 3 Key Indicators Population M 10.2 HDI 0.729 GDP p.c., PPP $ 10356 Pop. growth1 % p.a. 1.0 HDI rank of 189 102 Gini Index 33.7 Life expectancy years 74.5 UN Education Index 0.667 Poverty3 % 2.0 Urban population % 91.4 Gender inequality2 0.450 Aid per capita $ 276.9 Sources (as of December 2021): The World Bank, World Development Indicators 2021 | UNDP, Human Development Report 2020. Footnotes: (1) Average annual growth rate. (2) Gender Inequality Index (GII). (3) Percentage of population living on less than $3.20 a day at 2011 international prices. Executive Summary In 2021, the Hashemite Kingdom of Jordan marked the centenary of its founding. But while the country has made considerable advancements in its first 100 years, it faces unprecedented challenges in the form of the COVID-19 epidemic, which has shone a light on the necessity for further reforms across the board. On March 2, 2020, the Ministry of Health confirmed the first case of the novel coronavirus (COVID-19) in Jordan, altering the policy and priority landscape. On March 14, public gatherings were prohibited, schools suspended and borders closed. King Abdullah II issued a royal decree granting Prime Minister Omar Razzaz sweeping emergency powers to contain the COVID-19 threat. Jordan’s 10.2 million inhabitants would be in lockdown until April 30, by which date the kingdom had made international headlines for having one of the harshest lockdown measures worldwide. As of January 31, 2021, 326,855 people had been infected by and 4,316 people had died of COVID-19. However, this is not the complete picture. Similar to many countries around the world, Jordan will have to confront many mid-to-long-term ramifications, as a result of the ongoing pandemic. One sector that offers an illustrative snapshot of the impact of COVID-19 is tourism. Over the last two decades, Jordan has developed a thriving industry, taking advantage of its rich history and vivid natural environment. In 2019, more than five million tourists visited the country, providing approximately 10% of GDP. In the first third of 2020, following the closure of Queen Alia Airport on March 17, revenue dropped almost 40% and is yet to recover. With a debt-to- GDP ratio of 96%, per capita income declining from $9,471 in 2009 to $9,241 in 2017, and the official youth unemployment rate rising from 28% in 2014 to 34% in 2019, there were no shortages of persistent and immediate challenges facing Jordanian policymakers prior to the arrival of COVID-19. And yet, despite this unprecedented new factor in Jordanian social, economic and political life, the period under review was also marked by continuity.
BTI 2022 | Jordan 4 On September 27, 2020, as Jordan grappled with the coronavirus pandemic, the king dissolved parliament in order that parliamentary elections be held as scheduled in November. It came at a useful time with growing public frustration and discontent with the way Razzaz’s government had handled the pandemic, especially regarding the application of emergency powers. On July 16, 2020, the country’s Court of Cassation dissolved the Muslim Brotherhood, an organization that had been operating in Jordan since 1945. Later that same month, the teachers’ syndicate, many of whose 140,000 members had been protesting against the government, was shut down and a number of its board members arrested. In December 2020, the Amman Criminal Court dissolved the syndicate, which had only been established in 2011 after years of lobbying. With a little more than two years in the premier’s chair, Razzaz tendered his resignation. Elections were held on November 10, 2020, to a turnout of 29.88%, the lowest in the last decade. No prime minister or government was elected. Instead, as usual, the king appointed a new man, this time Bisher al-Khasawneh, as prime minister and charged him with assembling a cabinet. While maintaining the scheduled electoral cycle was a positive sign of sorts for democracy, the processes behind it underscored the continuing absence of competition more than 30 years after parliamentary life was reinitiated by the late king, Hussein, in 1989. The kingdom’s semi-authoritarian essence can, therefore, be said to have survived the first 10 years following the eruption of the Arab Spring. The state controls the reform narrative as the regime has no real coherent opposition. COVID-19 to date has done little to alter this fact. Indeed, the state, through the Razzaz government, used the application of a state of emergency to liquidate the teachers’ syndicate, formed after the events of 2011, and the Muslim Brotherhood.
BTI 2022 | Jordan 5 History and Characteristics of Transformation The Jordanian Hashemite Kingdom (Jordan) is a constitutional monarchy with a strong executive led by the king who rules and reigns. In the wake of King Abdullah II’s ascension, succeeding his father, Hussein, in 1999, Jordan witnessed an acceleration of liberalization with the domestic economy opened up further to global market forces and deregulation. In King Abdullah II’s first decade in power, a significant series of privatizations was completed: Arab Potash Company (2003), Jordan Phosphate Mines Company (2006) and Royal Jordanian Airlines (2007). Macroeconomic reform has been central to the Hashemite agenda, with associated successes in GDP growth (despite fluctuations), central bank stability and energy diversification. More than 10% of energy production now comes from renewable sources. Private sector expansion has been considerable but remains too small to absorb the tens of thousands of university graduates that seek entry into the job market annually. As a result, unemployment has remained persistently high, especially among young Jordanians. In 2018, the official unemployment rate exceeded 18% and was upward of 30% for young Jordanians. Political decision-making continues to be centralized. The king appoints the prime minister, the entirety of the Senate, judges to the kingdom’s courts, and (since 2014 and 2016) the head of the General Intelligence Directorate (GID) and the army’s chief of staff without the prior need for ministerial oversight. Decentralization changes made in 2015, while enabling greater public say in the composition of municipal and governorate councils, have simultaneously integrated these councils into the centralized hierarchy, as funding allocations remain centralized. Consequently, there is a sharp delimitation as to how empowered local government can be within the present architecture. Further, 2020 marked the second election in a row (after 2016) in which Jordanians could cast multiple votes in an open list electoral system after the removal of the single non- transferrable vote (SNTV). So far, however, this change, while welcome, has not resulted in more representative parliaments, as political parties remain weak and underfunded. Internationally, Jordan has continued to serve as one of the main host countries for refugees from Iraq, Syria and (to a lesser degree) Yemen. While not a signatory to the 1951 Geneva refugee convention, the Ministry of Planning and International Cooperation reported 1.3 million Syrians and almost 90,000 refugees of other nationalities living in Jordan. Meanwhile, other sources have even spoken of approximately 1.6 million Syrians and 0.5 million Iraqis, next to 2.1 million Palestinians. While the large refugee camps pose a considerable strain on the Jordanian economy, they are also an asset for Jordan’s recognition by the international community. After various Arab countries had embarked on a new path in relationships with Israel by late 2020, Jordan gained renewed attention as the traditional guardian of the “Haram al-Sharif” (Temple Mount) in Jerusalem. Given Jordan’s delicate inner division between Transjordanians (or “East Bankers,” those whose families lived east of the Jordan River after World War I) and Palestinians (those whose families lived west of the Jordan River and who form the majority now), the tutelage of the holy al-Aqsa Mosque and Dome of the Rocks has been more than just a symbolic privilege, it has been a cornerstone of the Hashemite’s royal legitimacy.
BTI 2022 | Jordan 6
The BTI combines text analysis and numerical assessments. The score for each
question is provided below its respective title. The scale ranges from 1 (worst) to
10 (best).
Transformation Status
I. Political Transformation
Question
1 | Stateness Score
The Jordanian state enjoys a stable monopoly over the means of coercion in the Monopoly on the
country. Yet, with long and remote desert borders to the northeast, east and south, use of force
Jordan is susceptible to smuggling operations, particularly operations focused on 8
cigarettes, narcotics, synthetic drugs, cash and fuel. To the north, the border with
Syria remains contested, and a Jordanian military presence is encamped along the
border to prevent spillover from the civil war and limit the activities of smugglers.
In April and November 2020, for example, attempts by smugglers to cross the
border in the Northern Military Zone were thwarted by Jordanian military
deployments. In the latter case, a search of the immediate area located 409 palm-
sized sheets of hashish and 36,335 Lyrica (pregabalin) pills.
Terrorism threats are comparatively low. According to the Global Terrorism Index
(GTI) 2020, Jordan ranked right behind Canada at 57th out of 138 surveyed
countries.
While there are no military threats to the state in the form of organized militias and
cartels, there are areas of the kingdom from which law enforcement agencies keep a
distance. This includes some parts of the Jordan Valley where, according to
anecdotal information, marihuana and other illicit substances are grown on farms.
This is made possible by powerful individuals supported by extended familial and
business networks. These social insulators have also prevented the law from being
applied indiscriminately, with deaths in the kingdom still caused by illegal
celebratory fire.BTI 2022 | Jordan 7 Apart from a small minority, all relevant groups within Jordanian society recognize State identity and accept the legitimacy of the state. In contrast, citizenship remains a contentious 7 subject. This is not so much because of the East Bank–Palestinian division within Jordanian society, but rather due increasingly to class divisions and inequalities in access to opportunities for different nationalities within Jordan. Two issues (perceptions of ethnic differences and socioeconomic opportunity), therefore, coalesce and increasingly stratify the lived experiences of Jordanians. The current citizenship regime still stipulates that children are conferred citizenship through their paternal parentage under Jordanian law. Consequently, only children with Jordanian fathers are automatically granted citizenship whether born within the kingdom or not. Since 2007, this has inspired a campaign founded by the late Nimeh Habashnah to change Jordan’s constitution and the associated nationality law (Law 6-1954) to allow Jordanian mothers the legally sanctioned right to pass their citizenship to their children irrespective of the nationality of their husbands. To date the law has not been changed, although the state has provided a range of privileges, including access to education and employment, for the children of these unions. On October 28, 2020, the Court of Cassation issued a ruling that could assist campaigners. It ruled that the word “children” in Jordanian law refers to both males and females. Activists commented that the court’s ruling could provide a legal opening for Jordanian mothers to demand in court that they be able to transfer their citizenship to their children. At the time of writing, this had not yet been tested. Jordan’s legal order is a mix of secular and religious elements. On one hand, the No interference of head of state (the king) must be a Muslim, while, on the other, the day-to-day religious dogmas operations of parliament see no dogmatic interference. Yet as a majority of 6 members of parliament are Muslim, associated norms are often expressed in relation to lawmaking. Religious courts (both Shariah and ecclesiastical) continue to perform central roles in matters pertaining to personal status. Despite amendments in 2014, women still require the permission of a male guardian to marry, and individual women cannot travel abroad with their children without the permission of their children’s father, a male guardian or judge. Further, in the absence of completely secular civil marriages, unions between Muslim women and non- Muslim men are not recognized. In other areas, the direct influence of theology and dogma on the legal order is minimal. For example, according to Article 5/B of the Law of Political Parties of 2015 (Law 39), political parties “cannot be formed on religious, sectarian, ethnic, or faction basis, or on discriminatory basis caused by gender or origin.” While the Islamic Action Front, Jordan’s largest political party, founded as an offshoot of the now dissolved Muslim Brotherhood, has a clear pro-Islam social, economic and political agenda, it cannot exclude non-Muslim members from its membership or organizing committees.
BTI 2022 | Jordan 8 Some temporary laws enacted to combat COVID-19 also saw their implementation influenced by religious sensibilities. On March 17, 2020, Jordan enacted the Jordan National Defense Law (Law 13-1992), which granted the prime minister broad emergency decision-making powers to combat the pandemic in the kingdom. One such measure was a nationwide lockdown that included Fridays. The lockdown was amended, under pressure from religious groups to allow Jordanians two hours to attend prayers, which repudiated the premise of a society-wide lockdown. The Jordanian state possesses basic administrative structures that facilitate the Basic provision of services. However, their distribution is not even. Access to education administration from primary through to tertiary, for example, is broad. Gross enrollment rates for 6 male and female students vary, with primary the highest at 81.8%, followed by secondary (65.2%) and tertiary (34.4%). Private as well as public providers exist at all levels. While 86% of Jordanians have access to a piped network for water, nationwide distribution remains reliant on trucks and residential storage tanks. Water deliveries in urban areas are made weekly, with frequency decreasing the further one goes from the capital. Overall, 93% of Jordanians have access to a safely managed water source, although only 77.3% of existing sanitation systems are understood by UNICEF to be safely managed. In relation to taxation, financial statements for both businesses and personal tax must be filed annually, and fines apply for non-compliance. Although tax law does not define residence for tax purposes, any entity registered in the kingdom is understood as being eligible for taxation. Personal income tax is calculated according to six levels of income from JOD 5,000 (approximately $7,050) to over JOD 1 million (approximately $1.4 million), with rates ranging from 5% – 30%. In June 2020, the government of Omar Razzaz ordered a crackdown on tax evasion, which analysts and the government say has reduced government revenues by billions of dollars, although calculating the exact sum remains a disputed and speculative exercise. During the first half of 2020, tax authorities raided more than 650 companies in the largest anti-tax evasion campaign seen in decades. While generally seen as positive, some in Jordan have questioned the ability of the government to maintain the campaign, on the one hand, and wonder, on the other, whether the use of emergency powers (e.g., giving the Integrity and Anti- Corruption Commission greater powers) is part of a witch hunt. The government has provided the core skeleton of internet infrastructure for the 6.78 million internet users recorded in 2020, with the number of internet users increasing 1.2% between 2019 and 2020. Regarding internet penetration, this suggests that 67% of the population had direct access to the internet in 2020. In comparison, 81% of people in Jordan had a mobile connection in January 2020. The COVID-19 experience (especially the protracted lockdowns and the reallocation of public funds to limit the impact on communities of the coronavirus crisis) in Jordan has demonstrated that the state is able to enforce compliance, while
BTI 2022 | Jordan 9 simultaneously it has elucidated the limits of the state’s ability to distribute services. Further, UNICEF data indicates that a wide range of services have been disrupted, including health care, WASH (water, sanitation and hygiene) and childcare services. A U.N. conducted survey in April/May 2020 found that 69.3% of those surveyed said they faced challenges accessing basic health care during the pandemic. Successive Jordanian governments have committed funds (up to a quarter of the annual budget) and resources to support the large population of refugees (Palestinians, Iraqis and Syrians) in the kingdom. Syrians have been integrated into Jordan’s public health care and education systems, a reality that continues despite the pandemic and the kingdom’s economic downturn. 2 | Political Participation Elections are a feature of Jordan’s political system, with members of municipal Free and fair councils, governorate councils and the lower house (Majlis al-Nuwāb) of the elections bicameral national parliament chosen in free ballots. National elections have been 4 conducted regularly but not consistently, with polls in 2003, 2007, 2010, 2013, 2016 and 2020. The most recent elections on the local and governorate level were held on August 15, 2017. Seat distribution for the Majlis al-Nuwāb is not representational across the kingdom, with Amman, Irbid and Zarqa constituencies (the three largest urban centers) allocated fewer seats than smaller more rural cities (e.g., Karak and Mafraq). This historical practice has been part of the Hashemite regime’s toolkit for gerrymandering the composition of parliaments and has resulted in the election of more predictable and compliant members of parliament through whom contentious legislation (e.g., the 1994 peace with Israel, the 2014 and 2016 personnel appointments, and 2016 deal to purchase gas from Israel) can be passed. The most recent election, held in the midst of the COVID-19 pandemic on November 10, 2020, had unsurprisingly the lowest official turnout in decades, with 29.88% of eligible voters participating. Although there were allegations of suspect behavior, the overall operation of polling day is considered a success. The poor turnout, meanwhile, is an indication of societal apprehension given the highly contagious coronavirus and a lack of confidence in the established electoral process to produce parliaments capable of representing broad citizen (as opposed to personal and familial) interests. The results mirror public turnout: 15 women were elected, all of them to seats reserved by quota for women, down from the 20 elected in 2016. The Islamic Action Front (IAF), the largest party of the opposition and best organized political party in Jordan, which put forward 41 candidates, lost half of its seats. While 100
BTI 2022 | Jordan 10 first-time members of parliament were elected, only 15% of members of parliament are under the age of 40, despite the majority of the population being under 35 years of age. Meanwhile, the civil current represented by the Ma’an (Together) List, which performed strongly in 2016, lost ground in 2020. The Civil Alliance Party, which had provided some organizational support to the list, disintegrated prior to the election, which contributed to Ma’an’s poor showing. Yet, more than this, the worsening economic conditions may have further incentivized Jordanians to vote according to familial/tribal lines in the hope of acquiring access to state resources in the new parliament. Unsurprisingly, independent representatives with strong tribal backing dominate the new parliament. Jordanian elections have been supervised by international monitors since widespread voter fraud was uncovered following the 2007 general election. The Independent Election Commission (IEC) has overseen the running of elections since its creation in 2012. There are also a number of very competent local monitors, such as RASED Jordan. But while members of the lower house are elected, their counterparts in the upper house (Majlis al-‘Ayān) are royal appointees. The prime minister, who in turn nominates the cabinet, is also a royal appointee. The effective power of elected officials to govern remains limited as a result of the Effective power to hegemonic power of the executive, which is wielded primarily by the king. govern Government, therefore, exists outside of parliament, which has implications on the 2 ability of elected officials to govern effectively. In short, they cannot. The government cabinet is appointed by the prime minister, who is in turn chosen by the king. Elected representatives in the Majlis al-Nuwāb participate in governing primarily by debating and passing legislation, the majority of which is introduced to parliament by the government. Once draft bills have been passed by the lower house, they proceed to the Majlis al-‘Ayān for further debate. As a body composed of royal appointees, the Senate is a space in which the royal agenda is brought to bear on the legislative process. The unelected executive can also restrict the role of elected officials through state of emergency laws, such as those declared in March 2020 ostentatiously to allow the state to tackle the COVID-19 pandemic effectively. The constitution enshrines freedom of association for all Jordanians “within the Association / limits of the law” (Article 16). Therein, legislation is essential in giving this assembly rights constitutional stipulation life. It is here where Jordan’s present experience falls 4 short. On March 17, 2020, the Razzaz government implemented a state of emergency. Since then, rights groups both inside and outside Jordan have voiced concerns about its application, which limits people’s freedom to assemble. The kingdom entered and subsequently exited a series of lockdowns during the course of 2020 and early 2021. By mid-2020, Jordan had become renowned for having one of the most comprehensive lockdown policies in the world. While this achieved low rates of community transmission, it has negatively affected poor Jordanians and those dependent on day-wage labor.
BTI 2022 | Jordan 11 Most notably, this has had a disastrous impact on the teachers’ syndicate. Established in 2011 after decades of lobbying successive governments, the syndicate began protesting in July 2020 against the government’s failure to implement an agreed pay increase, which had been negotiated between the syndicate and the Ministry of Education. State authorities responded by raiding syndicate offices on July 25, arresting 13 board members and liquidating the syndicate. The Carnegie Protest Tracker defines the kingdom as “partly free.” Similar to freedom of association, the freedom to express opinions is guaranteed in Freedom of the constitution provided that expressions do “not go beyond the limits of the law” expression (Article 15). There are a number of long-standing taboo topics. For example, the 4 king cannot be criticized, while any criticism of a member of the royal family is risky, unless facilitative societal conditions exist, as was the case with public criticism of Queen Rania in 2011. There have been detentions and arrests of vocal critics of government policy in general as well as in response to the COVID-19 pandemic. A gag order, for example, was imposed by the state attorney general in July 2020 on reporting of the banning of the teachers’ syndicate. The gag order extended to social media as well as conventional media. Other critics of government policy have also been harassed. In April 2020, the general manager and news director of Roya TV, Fares Sayegh and Mohamad al-Khalidi, were arrested after a program aired on the station that included a group of laborers criticizing the government’s lockdowns. The laborers had complained that the government lockdowns were the reason for why they could not feed their families. Both Sayegh and al-Khalidi were released three days later. Popular cartoonist Emad Hajjaj was arrested on August 26, 2020, for publishing a cartoon lampooning the peace compact between Israel and the United Arab Emirates. Although he did not mention the United Arab Emirates’ leader – it is a red line in Jordan to attack the heads of Arab states – his interjection into the normalization process was deemed contentious enough to warrant the setting of an example. He was released four days later amid local and international outcry. 3 | Rule of Law The state of emergency declared in March 2020 enabled the government and the Separation of executive (the prime minister in this instance) to rule with minimal checks and powers balances from the judiciary. Meanwhile, the International Center for Not-For-Profit 3 Law has voiced concerns over the application of emergency laws from the suspension of newspaper sales in March 2020 to the arrest and detention of citizens believed to be breaking curfews. The pandemic aside, an important consideration regarding checks and balances concerns the relationship between the Constitutional Court and the parliament. The 2011 amendments that facilitated the creation of the Constitutional Court in 2012
BTI 2022 | Jordan 12 granted Constitutional Court judges the ability to nullify laws legislated in parliament that are deemed unconstitutional. However, the amendments did not grant parliament any authority over Constitutional Court decisions nor a say in who is appointed to the Constitutional Court. This further advantaged the king over the parliament in settling constitutional matters. Jordan’s constitution establishes provisions for three categories of courts: civil, Independent religious and special courts. Civil courts include magistrate, appeals and cassation judiciary courts as well as courts of first instance and courts for major felonies. Religious 5 courts, both Shariah and ecclesiastical, handle cases related to personal status. The special court category includes Jordan’s State Security Court and land settlement court. Tribal courts were officially abolished in 1976. However, tribal tribunals and legal customs (e.g., “Jalwa,” the banishment of extended families as collective punishment for the convicted crimes of one family member) are still utilized in the kingdom and can make their way into regular court jurisdictions. All court hearings are judge-only, as there are no jury-based courts in Jordan. Defendants are appointed a lawyer by the court before which they appear if they cannot afford to provide their own. Article 97 of the constitution guarantees judicial independence. However, this stipulation exists alongside the reality that all judges of civil and Shariah courts are royal appointments. This means that the king can intervene in judicial affairs, although the appointment process is overseen by the country’s High Judicial Council. Notably, there exists no body, including the Judicial Council, through which judicial independence is guaranteed in practice. Open royal interventions are rare, however. Jordan has launched a number of anti-corruption campaigns and established several Prosecution of anti-corruption institutions, most notably the Integrity and Anti-Corruption office abuse Commission (JIACC), which has had its competencies strengthened by amendments 4 to the Integrity and Anti-Corruption Commission Law that were approved by the cabinet in June 2020. For example, the JIACC is now able to initiate investigations relating to money-laundering and negotiate settlements with perpetrators if laundered money is returned according to the stipulations of the Economic Crimes Law. In 2019, the JIACC recorded 948 investigations, of which 277 were passed on to the public prosecutor. The commission’s work increased in 2020, with 1,289 investigations conducted by the end of October, although only 150 were referred to the public prosecutor. Consistency remains a challenge as public officeholders are rarely at the center of these investigations, especially if they enjoy a degree of royal favor. As such, there is no systematic prosecution of officeholders who are suspected of having abused their positions.
BTI 2022 | Jordan 13 In 2018, news broke of what would become known as the Qadhiiyat al-Dukhan case (the smoke case). In the case, it was claimed that Jordanian businessman Awni Yousef Mutee masterminded a counterfeit cigarette production and smuggling operation, utilizing two free trade zones in al-Zarqa and al-Muwaqqar, between 2006 and 2018. Prosecutors allege that tax evasion from the scheme alone was worth $760 million. In the wake of public outcry, then Prime Minister Omar Razzaz requested that the case be handled by the State Security Court, which in 2019 indicted 54 Jordanians including Widah al-Hamoud, a former Head of Jordanian Customs. The trial remains ongoing despite numerous setbacks, including the need to repatriate wanted individuals from abroad and the death of defendant Yousef Antoun Khazam, a Lebanese national, mid-trial. Civil rights are guaranteed by the constitution in principle, but in practice are Civil rights framed and limited by legislation, meaning that in reality rights become more akin 5 to privileges that can be granted and removed when politically expedient. The pandemic has further highlighted this. Redress is a complicated issue in Jordan precisely because the constitution gives parliamentary legislation a central role in forming rights. Women remain subject to a number of discriminatory practices that owe much to societal regulation and cultural norms. In Shariah courts, for example, which adjudicate personal status disputes, a woman’s testimony is not equal to that of a male co-national. Homosexuality, while not illegal under existing law, remains stigmatized in socioreligious terms and individuals can be charged with disturbing public morality. A U.N. report noted that the actions of the Jordanian government against the teachers’ syndicate are “a serious violation of the rights to freedom of association and expression.” Yet, while the government operates within the contours of the state of emergency justified by the COVID-19 pandemic, there are few avenues through which to pursue redress. Access to the Constitutional Court, whose establishment in 2012 was greeted with some optimism, is difficult for individual citizens. In practical terms, this makes it difficult for individual citizens to seek redress for government decisions.
BTI 2022 | Jordan 14 4 | Stability of Democratic Institutions Officially, Jordan is a constitutional monarchy with delineated roles for the Performance of executive, legislative and judiciary. Democratic institutions exist at multiple levels. democratic Local municipal councils are composed of members who are directly elected, institutions although mayors remain appointed. Elections also occur at the governorate level for 2 the composition of governorate councils. At the national level, general elections decide the make-up of the lower house, but not of the Senate whose members are royal appointees. In practice, therefore, the delineation of roles, powers and responsibilities are blurred, with these elected and non-elected bodies existing within the context of a semi-authoritarian state and a powerful executive. Inevitably, this has an impact on performance. The capacity of the lower house to operate as the crucible of democratic governance delimited by the following factors. First, the prime minister is appointed by the monarch, not by parliament or popular vote. A constitutional amendment passed in 2011 stipulates that the king must consult with parliament on his selection of premier. However, this requirement is largely theoretical. Hani al-Mulki (2016 – 2018), Omar Razzaz (2018 – 2020) and now Bisher al-Khasawneh (2020 – present) were all appointed without parliamentary consultation. All incoming governments are required to seek a vote of confidence from the parliament. Second, government cabinet members are not required to be members of parliament, meaning that the government exists separate from democratic institutions and, therefore, to a degree of public scrutiny. At the municipal level, citizens elect the members of their municipal councils, although mayors of significant municipalities such as the Greater Amman Municipality (GAM) are appointed by the king. There are 101 municipalities in Jordan. However, despite the enactment of a new municipalities and decentralization law in 2015, which was in effect for the 2017 elections, municipal councils remain hamstrung in their ability to facilitate and empower local decision- making. The package of decentralization legislation enacted in 2015 does not represent a return to what was arguably the high-water mark for Jordanian municipalities, the Municipality Law of 1955, which bestowed upon municipal councils the prerogatives of tax collection, urban utilities (e.g., water, electricity and garbage collection) and social services. Many of these have been stripped from councils in the intervening decades and were not returned in the 2015 laws. For example, municipalities do not collect taxes nor manage water distribution (now the prerogative of the Ministry of Water and Irrigation). Similarly, electricity provision is handled by the Jordan Electricity Authority and local transportation is managed by the Ministry of Transport. Instead, municipalities coordinate local concerns with central government and private sector service providers.
BTI 2022 | Jordan 15 Structural limits on democratic performance aside, the democratic institutions and Commitment to procedures that do exist are recognized as legitimate by major domestic democratic stakeholders. However, questions concerning how these institutions should evolve institutions and how much power they should be able to wield persist. There remains 3 widespread mistrust of political parties and members of parliament, and doubts about whether they’re able to function as powerholders, which lends some public consent to the established semi-authoritarian order. In particular, even prior to the 2011 uprisings, the king has been a vocal advocate of the seemingly inevitable democratization of the country. However, although he has been a staunch supporter of greater democratization, including the goal of establishing a system of parliamentary government, the king has simultaneously taken steps that seem to impede the emergence of this objective. The constitutional amendments of 2014 and 2016, which grant the king the unilateral authority to appoint the heads of the army and GID without parliamentary or ministerial oversight, is evidence of this tension. New decentralization and municipalities laws were approved in 2015 (laws 41 and 49), which devolved some powers from Amman to the governorate councils. However, this does not include the power to allocate funds, which remains centralized. As such, the two laws preclude the possibility of further decentralization within the existing framework, as the governorate councils have in practice been centralized. 5 | Political and Social Integration The contemporary political party system was established in 1992 when political Party system parties were legalized after more than 20 years of martial rule. Since then, the law 3 governing how political parties are structured and what functions they can perform has been amended several times, most recently in 2015. There are 48 political parties currently registered in the kingdom, 47 of which participated in the 2020 elections. Jordan’s political parties possess neither the financial means, nor the social capital or connectivity required to aggregate societal interests into coherent and competitive party ideologies and policy platforms. Consequently, all parties struggle to acquire and sustain a nationally constituted membership and voting share. The sole exception could be the Islamic Action Front (IAF), but even it relies on local kinship and candidates’ personal connections for electoral success. This remains the case even following the removal of the single non-transferable vote (SNTV) and its replacement with an open list model in 2016. Voters cannot elect a list, but rather individuals from a list, meaning that candidates from the same party invariably compete against each other. As a result, familial and tribal social networks function as important sources of electoral capital. This has been proven in every electoral cycle, most recently in 2020 when all parties lost seats and vote share. This includes the IAF, which
BTI 2022 | Jordan 16 suffered from widespread disillusionment within Jordanian society following the deregistration and liquidation of its parent organization, the Muslim Brotherhood. Because the IAF is registered with the Ministry of Political and Parliamentary Affairs, it is able to continue operating, despite the ban on the Muslim Brotherhood. Cooperative associations have a rich history in Jordan, dating back to the early Interest groups years of the kingdom. They include trade unions and professional syndicates, and 4 sporting and religious associations, among others. For example, the Orthodox Educational Society has, since 1957, provided a range of educational services, such as university scholarships, to Jordanians of all faiths. Within Jordan, there are both official and unofficial/independent unions. The former refers to groups that are officially registered, while the latter refers to groups that are technically illegal as they are unregistered. Invariably, this complicates the ability of labor to organize and to mobilize in order to advance working conditions. The professional syndicates, right down to the university level, have internal elections for their boards. Jordan’s engineers, doctors and lawyers’ syndicates have proven to be influential in policymaking, and thus positions within them are fiercely contested. However, while influential, there are distinct limitations as to how much syndicates can push government. The liquidation of the teachers’ syndicate, which represented some 140,000 members, in 2020, after waging a protest movement against the Razzaz government, demonstrates that mediating between society and the political system is a precarious game. As a semi-authoritarian political system, it is necessary to note from the outset that Approval of there are no established democratic norms or practices comparable to those democracy observed in more fully fledged democracies. However, this is not to say that n/a approval of democratic norms and procedures does not exist. The International Republican Institute asked Jordanians in 2019: “to what extent [do] you think each of these systems would be suitable for Jordan?” The question listed five systems: a system governed by Islamic law without political parties or elections; a parliamentary system in which nationalist, left-wing, right-wing and Islamist parties compete in parliamentary elections; a government that provides for the needs of its citizens without giving citizens the right to participate in the political process; a strong authority that makes decisions without considering electoral results or the opinions of the opposition; and a parliamentary system in which only nonreligious parties compete in parliamentary elections. The first two options each received the highest level of support (“completely suitable” or “suitable”) from 49% of respondents. Interestingly, the third and fourth options were considered by a majority of respondents (52% and 56%, respectively) to be “not suitable at all for Jordan,” suggesting that there is a reasonable degree of underlying support for democratic norms in Jordan.
BTI 2022 | Jordan 17 Support for existing realities, however, illustrates a pessimism concerning the state of democratic procedures in the kingdom. The most recent and fifth installment of the Arab Barometer (2019) survey shows that a dramatically smaller percentage of Jordanians trust the government than 10 years ago. Overall, 38% of surveyed Jordanians say they have “a great deal or quite a lot of trust in the government,” a decline by almost half compared to 2010. Similarly, the Konrad-Adenauer- Stiftung’s Regional Program Political Dialogue South Mediterranean (KAS PolDiMed) 2020 survey found that fewer than a third of Jordanians (23%) have confidence in political parties and 37% trust the parliament. The survey was recorded before and after the November 2020 elections. In Jordan, there is a broad array of local and international civil society Social capital organizations. These range from environmental groups (Royal Society for the 5 Conservation of Nature) to millennial organizations for sustainable development (I- DARE for Sustainable Development). Yet, more concrete social capital has historically been formed within familial and kinship associations. In part, this is a consequence of the long period of martial law during the last century when many social and political organizations found their operations curtailed by royal agency. Further, Jordanian society remains traditional in so far as familial, tribal and personal relationships play a more important role in the ways citizens navigate their day-to-day relations with the state than institutionalized identities such as citizenship. More than 30% of Jordan’s population identifies with an East Bank– Bedouin background, according to the UNHCR. This figure does not include tribes (and clans within them) who have been urbanized for more than a century, such as the Ghassasinah clans in Karak. Within these networks and relationships, there is a substantial degree of social capital and self-organization. Employment opportunities are often accessed through family connections, while difficulties with the police can sometimes be smoothed over by reference to a family member within the state apparatus. Class is an increasingly important factor, as individuals need to belong to prominent families within prominent tribes in order to maximize their opportunities. Tribes and familial networks have adopted greater significance politically given the low levels of trust in political parties. KAS PolDiMed’s findings show that only 23% of Jordanians say they trust parties “fully, a lot, or somewhat.” Therefore, familial history is called upon as a trust-building element during election campaigns at all levels, whether municipal, governorate or national.
BTI 2022 | Jordan 18
II. Economic Transformation
Question
6 | Level of Socioeconomic Development Score
Significant and persistent inequalities exist in Jordan. The proportion of Jordan’s Socioeconomic
over 10 million population living in multidimensional poverty is small at around barriers
0.4%, according to the UNDP. Nevertheless, the income share of the richest 10% of 4
the population is greater at 27.5% than the income share of the kingdom’s poorest
40% of population, which stands at 20.3%. These wealth disparities are not new but
are structurally engendered and reflected in Jordan’s position in the lower half of
the global Human Development Index (HDI), with a ranking of 102 out of 189
countries. However, with an HDI score of 0.729, Jordan is well located broadly
within the index, although Jordan’s score drops to 0.622 when inequality is factored
in and the overall loss in HDI due to inequality is 14.7%.
Jordan’s Gender Inequality Index (GII) score has improved from 0.667 in 1995 to
0.450 in 2019, although it has changed little in the years since 2017, suggesting a
more rigorous social and policy approach is required to induce further
improvements.
With 326,855 infections and 4,316 deaths as of January 31, 2021, the COVID-19
pandemic has left a heavy mark on the kingdom, despite several lockdowns, which
have negatively affected socioeconomic opportunities. This is especially concerning
given the struggles of many Jordanians were facing prior to the emergence of the
epidemic. An assessment from the UNDP released in May 2020 revealed
concerning signs about the capacity of Jordanians to weather the COVID-19 storm
without substantial assistance. Of the more than 12,000 Jordanians surveyed 6.8%
said they had maintained their employment post-lockdown. Furthermore, of the
participants who were employed prior to the onset of the epidemic, 58.6% reported
having lost all of their income.
Regarding opportunity, a significant proportion (21.9%) of respondents reported
that they did not have access to the internet, which they identified as necessary for
work or education. Because Jordan has entered and exited a series of lockdowns
during the course of 2020 and early 2021, poor or nonexistent internet access risks
impeding people’s ability to recover from the epidemic.BTI 2022 | Jordan 19 Economic indicators 2017 2018 2019 2020 GDP $M 41409.0 42932.1 44502.9 43697.7 GDP growth % 2.1 1.9 2.0 -1.6 Inflation (CPI) % 3.3 4.5 0.8 0.3 Unemployment % 15.8 16.3 16.9 18.5 Foreign direct investment % of GDP 4.9 2.2 1.9 - Export growth % 1.7 0.9 6.5 -35.8 Import growth % 2.5 -6.6 -3.1 -18.2 Current account balance $M -4392.8 -2962.8 -1003.5 - Public debt % of GDP 76.0 75.1 78.0 88.0 External debt $M 30051.5 31925.2 33481.6 38016.1 Total debt service $M 1865.9 2251.8 3343.1 3107.9 Net lending/borrowing % of GDP -2.5 -1.5 -3.3 - Tax revenue % of GDP 14.8 14.9 14.8 - Government consumption % of GDP 17.4 17.1 17.3 18.4 Public education spending % of GDP 3.2 3.0 3.0 - Public health spending % of GDP 3.6 3.8 - - R&D expenditure % of GDP - - - - Military expenditure % of GDP 4.8 4.6 4.6 5.0 Sources (as of December 2021): The World Bank, World Development Indicators | International Monetary Fund (IMF), World Economic Outlook | Stockholm International Peace Research Institute (SIPRI), Military Expenditure Database.
BTI 2022 | Jordan 20 7 | Organization of the Market and Competition Improving market-oriented competition has been a hallmark of King Abdullah II’s Market reign. According to the World Bank’s “Doing Business” report, Jordan jumped organization from 104 out of 190 countries in 2019 to 75 by the end of 2020 for ease of doing 6 business. In so doing, Jordan ranked among the three most improved countries globally for the first time. This was achieved through three main policy areas. First, the legal rights of lenders and borrowers were strengthened, and a unified, geographically centralized framework for securing transactions was implemented. Second, the kingdom’s outdated insolvency law was amended, making it easier for viable but liquidity deficient firms to reorganize and restructure. Third, an electronic payment filing system for labor taxes was introduced, reducing the time spent on fiscal compliance. As part of this, the number of payments per annum to be paid by businesses was cut from 23 to nine. For starting a business, the kingdom ranked 120 out of 190 countries, with the number of days (12.5), number of procedures (7.5) and cost (23.3% of per capita GNI) open to further improvement. Under the terms of Jordan’s import and export law, the government can impose prohibitions or restrictions on imports for reasons of public safety, health risks, environmental concerns or protection of national resources, or if required by U.N. security council resolutions. The International Labor Organization (ILO) released a study in May 2020 that found 55% of surveyed employees said their employment was temporary, irregular or seasonal in nature. While this is distinct from informal employment, which the ILO study suggests encompasses 35% of surveyed citizens, the two figures together illustrate the extent of precarious work that exists in the labor market. Jordan introduced a competition law in 2002 (approved in 2004) and is a member of Competition policy the International Competition Network (ICN) and the Multilateral Investment 7 Guarantee Agency (MIGA). A competition directorate within the Ministry of Industry and Trade monitors the application of the competition law. The state remains active in sustaining subsidies and price fixing arrangements Although these continue to be reduced, they remain important politically and so will foreseeably be retained for the mid-to-long term. Foreign ownership is permitted across all sectors, except those of a sensitive nature. For example, non-Jordanians cannot own in part or in full security service companies, customs services or bakeries of any kind. Other industries, including newspapers and maritime maintenance, require up to 50% domestic ownership.
BTI 2022 | Jordan 21 Trade liberalization and the further integration of the kingdom into the global Liberalization of economy is an avowed priority of King Abdullah II. An indication of this is the foreign trade score awarded to Jordan in the KOF Globalization Index, which in 2018 was 73.4, a 8 little behind Israel’s 76.88. As a member of the WTO, Jordan complies with WTO tariff statutes. Import tariffs between 0% and 30% remain on a range of products on the basis of the cost, insurance and freight (CIF) value. Its most recent (2019) simple average MFN is 10.1%. Import limitations exist for certain manufactured goods, while the state regulates others such as fresh milk, tomatoes and salt. Licenses are required to import some chemicals, medicines and telecommunications equipment. The state does what it can within the statues of its international agreements – which include several bilateral free trade agreements (including USA 2001/2010, EFTA 2002, Singapore 2004, Canada 2008) in addition to the EU Association Agreement (2002) and the Agadir Agreement (2007) – to facilitate and protect domestic agriculture and manufacturing. Further, in January 2020, the Jordan Investment Commission (JIC) instituted an investor grievance bylaw, which allows investors with grievances regarding decisions made by government agencies to file complaints and seek resolution. Historically, banking is one of Jordan’s most significant sectors, with the combined Banking system assets of the sector totaling $79.5 billion at the end of the third quarter of 2020. To 8 bring the sector in line with international standards, the central bank of Jordan moved toward providing a framework for the full implementation of Basel III regulation in 2018. As part of this, banks in Jordan need to sustain a capital conservation buffer of 2.5%, in addition to 2.5% as a countercyclical capital buffer. As in a number of other countries, the COVID-19 pandemic has complicated the timeframe for the complete implementation of Basel III. The pandemic also challenged day-to-day lending and capital ratios. In the first half of 2020, the capital-adequacy ratio was 17.9%, which is higher than the rate mandated by the central bank. During the same period, the share of non-performing loans equated to 5.4% of total loans, a slight upward trend on the 5.2% at the same time in 2019. Hard budget constraints include above all Jordan’s debt levels, which have remained stubbornly high over the last two decades, and – after shrinking in recent years – look to be expanding once again to absorb spending and income losses related to the pandemic. Public debt increased 6.6% in the first six months of 2020 to $45 billion, resulting in debt increasing above the 100% ceiling to 101.8% of GDP.
BTI 2022 | Jordan 22 8 | Monetary and fiscal stability The central bank of Jordan handles monetary policy with operational independence. Monetary stability Consisting of eight members, the board is chaired by the bank’s governor who is 8 appointed by the king. The current governor, Ziad Fariz, was appointed in January 2012. The Jordanian dinar (JOD) remains pegged to the U.S. dollar, which helps to keep the currency value stable (albeit CPI inflation reached 4.5% in 2018, before contracting to 0.8% in 2019), while keeping costs of living in the kingdom high in comparison to neighboring countries. The Jordanian Department of Statistics reported in October 2020 that the general consumer price index (CPI) for the previous month increased by 0.10%, reaching 101.00 points compared to September 2019. Despite securing loans from the IMF to service the widening hole in its debt ceiling, Jordan needs to continue to search for further loans, which – the longer the pandemic continues – will increasingly restrict its ability to recover quickly from the crisis. It is unlikely that a consistent policy package will be deployed given the volatile domestic and global environment. This will undoubtedly challenge monetary stabilization. Jordan’s budget, similar to its pre-COVID-19 circumstances, will require Fiscal stability international support moving forward. In January 2020, the kingdom secured a $1.3 4 billion four-year loan from the IMF to service a debt that has grown steadily since then as the country’s economy contracts. Through 2020, the parliament, when it was sitting, demonstrated a distinct apprehension to passing new taxes, which will be necessary to boost domestic revenues. Toward the end of 2020, ratings organization Fitch affirmed Jordan’s BB- credit rating, acknowledging the country’s vulnerable fiscal situation. The kingdom is not eligible for the World Bank’s Debt Service Suspension Initiative (DSSI), which means it will have to find other means of servicing its loans. The 2021 budget, whose details were introduced to and debated by parliament in early 2021, expected domestic revenues to be JOD 7.8 billion. Based on these figures, domestic revenue will be insufficient to cover the cost of government services and interest payments on existing loans given public debt increased 6.6% in the first six months of 2020 to $45 billion, which resulted in debt increasing above the 100% debt ceiling to 101.8% of GDP.
BTI 2022 | Jordan 23 9 | Private Property The protection and regulation of private property rights is well established in Property rights domestic law and is supported by Jordan being signatory to the Paris Convention 8 for the Protection of Industrial Property and the World Intellectual Property Organization. The kingdom’s legal framework is consistent with international standards for copyrights, phonographs and performances in addition to the Trade Related Aspects of Intellectual Property Rights (TRIPS). Jordan was ranked competitively by the International Property Rights Index (IPRI) in 2020, ranking seven out of 15 regionally and 42 out of 129 globally. Previously, Jordan ranked fifth out of 18 MENA countries and 42 out of 128 countries globally, demonstrating the country’s overall stability in this area. Jordan’s Department of Lands and Survey (DLS) is the responsible authority for property registrations. No transaction of land is deemed legal if it is undertaken without approval from the DLS. There are some important exceptions where other agencies, such as the Jordan Valley Authority (JVA) and the Aqaba Special Economic Zone Authority (ASEZA), take a leading role. For example, the ASEZA is responsible for land transactions and zoning in Aqaba. Meanwhile, the DLS has assisted the JVA in mapping property boundaries registrations. Title deeds have now been issued for tenant farmers. All privately owned land plots in the largest city, Amman, are mapped, as are all privately held land plots across the economy. Transactions of land sales, registrations and acquisitions are burdened by rigid legal structures, long in-person procedures, and, in some cases, nepotism. Familial or private relationships with DLS staff improves transaction times. Article 11 of the constitution asserts that “no property of any person may be Private enterprise expropriated,” except in cases where public utility demands it and a “just 7 compensation” is provided. Private companies are both permitted and protected under a series of laws, including the Jordanian Companies Law of 1997 (most recently amended in 2017), the Investment Law of 2014 and the Public Private Partnership Law of 2014. Additionally, as Jordan is a WTO member, foreign investors in the country are able to seek external arbitration for settlements. Privatization is a contentious subject in Jordan and one where public discontent persists. It is an area, however, which continues to be viewed as important in securing the economic future of the kingdom. As such, it continues to be advanced. In January 2020, lawmakers approved the new Public Private Partnership (PPP) Law, making it easier for local and external actors to provide private sector investment. Alongside this, a new PPP unit was established to better identify such investment opportunities. The Jordanian Action for the Development of Enterprises (JADE), a three-year project that ended in 2020 and was co-funded by the European Union, is an example of government action seeking to meet the market. In total, JADE supported 119 local startups, providing business support, incubator services and more than 20 mentors.
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